Tag Archives: Social Science

Scenario planning is a popular way to think about possible futures. In scenario planning, one seeks a modest number of scenarios that are each internally consistent, story-like, describe equilibrium rather than transitory situations, and are archetypal in representing clusters of relevant driving forces. The set of scenarios should cover a wide range of possibilities across key axes of uncertainty and disagreement.

Ask most “hard” science folks about scenario planning and they’ll roll their eyes, seeing it as hopelessly informal and muddled. And yes, one reason for its popularity is probably that insiders can usually make it say whatever they want it to say. Nevertheless, when I try to think hard about the future I am usually drawn to something very much like scenario planning. It does in fact seem a robustly useful tool.

It often seems useful to collect a set of scenarios defined in terms of their reference to a “baseline” scenario. For example, macroeconomic scenarios are often (e.g.) defined in terms of deviation from baseline projections of constant growth, stable market shares, etc.

If one chooses a most probable scenario as a baseline, as in microeconomic projections, then variations on that baseline may conveniently have similar probabilities to one another. However, it seems to me that it is often more useful to instead pick baselines that are simple, i.e., where they and simple variations can be more easily analyzed for their consequences.

For example even if a major war is likely sometime in the next century, one may prefer to use as a baseline a scenario where there are no such wars. This baseline will make it easier to analyze the consequences of particular war scenarios, such as adding a war between India and Pakistan, or between China and Taiwan. Even if a war between India and Pakistan is more likely than not within a century, using the scenario of such a war as a baseline will make it harder to define and describe other scenarios as variations on that baseline.

Of course the scenario where an asteroid destroys all life on Earth is extremely simple, in the sense of making it very easy to forecast socially relevant consequences. So clearly you usually don’t want the simplest possible scenario. You instead want to a mix of reasons for choosing scenario features.

Some features will be chosen because they are central to your forecasting goals, and others will be chosen because they seem far more likely than alternatives. But still other baseline scenario features should be chosen because they make it easier to analyze the consequences of that scenario and of simple variations on it.

In economics, we often use competitive baseline scenarios, i.e., scenarios where supply and demand analysis applies well. We do this not such much because we believe that this is the usual situation, but because such scenarios make great baselines. We can more easily estimate the consequences of variations by seeing them as situations where supply or demand changes. We also consider variations where supply and demand applies less well, but we know it will be harder to calculate the consequences of such scenarios and variations on them.

Yes, it is often a good idea to first look for your keys under the lamppost. You keys are probably not there, but that is a good place to anchor your mental map of the territory, so you can plan your search of the dark.

While Paul Krugman and I disagree on some things, but those disagreements are small compared to our common ground, from being both economists. Especially on the future, where most folks rely way too much on their intuitive naive social science. So it was a pleasure to read Krugman being reasonable on the future:

Maybe by the 24th century it’ll be different again, but I’m not so sure about that optimistic view of Captain Picard. One thing I think we see is that greed has a way of breaking through, no matter what we do on other fronts. … I think we’re probably going to have something like a market as far as the eye can see, although actually by the 24th century, since the artificial intelligences will probably be doing everything … I don’t know how they’ll do it, but we don’t need to know because they’ll do it. …

You’d like to imagine that we could eventually get to a point where we really are post-scarcity. But it’s a hard road. John Maynard Keynes wrote an optimistic essay called “Economic Possibilities for our Grandchildren” [PDF] in the ’30s where he talked about once the world was four times or eight times as rich as it was when he was writing, at that point we would no longer be concerned about material things and we could get past all of this striving and greed. And actually we are about as much richer as we were supposed to be according to [Keynes] projection, and somehow the striving and greed is still with us. So it’s a further away goal than we’d like to imagine. …

When I’m having a bad day, I try to think, “What are the possible routes by which we don’t turn into a dystopian society?” I mean, we’ve got the environmental threat, … [and] there’s real echoes of the 1930s in a lot of what’s going on politically, mostly in Europe, but there’s some of it here too. And information technology has been so far by and large a force for liberation, but it’s not too hard to see how it could turn into a force for the opposite. …

It’s quite possible that the long run state, that the natural state, except for special episodes, is one of extreme inequality. … I was asked to write something … written as if looking backwards from the year 2096. … I wrote of a society where basically not just the middle class was gone but education was devalued and wealth came largely just from owning resources — back to the old days of a resource-based aristocracy. We still think of that “Ozzie and Harriet society,” … that we had for a generation after World War II as being somehow the natural end state of modern technology, modern development, and I guess the balance of the evidence says, no, that’s not how it works. …

I’m not sure exactly how major media organizations are going to survive in the long run. … We thought for a while that it was going to be very democratizing, and it turns out not to be. … You end up with what is a very hierarchical system, in which a few people really do garner the great bulk of the attention in any particular area of discussion. (more; HT Tyler)

It seems here that for Krugman a society with extreme inequality must be dystopian, no matter what its other features. With that view I heartily disagree. But that’s a political value judgment, not economics.

Imagine that centuries ago a visionary had foreseen all of the following:

1. Future people would live in modern high rise buildings.
2. Interior high-rise apartments need elevators, mailboxes, forced air, piped water, and artificial light, to let residents exit, talk, breath, drink, and see.
3. High-rises are expensive and require lots of coordination to manage.
4. Large rich for-profit organizations can build and manage high-rises, and then rent apartments to residents.

Finally, imagine that this visionary concluded that high-rise residents would in essence be slaves of their rich landlords. He reasons that residents must live in mortal fear of landlords who could at any time cut off their exit, talk, light, water, and air. Facing landlords with that much power over them, surely residents must be slaves.

Of course real residents of modern high rises are not remotely slaves. Yes landlords have the physical ability to kill residents by cutting off their exit, talk, light, water, and air. But any landlord that did this would be in a world of trouble, both via losing customers, and via legal punishment. It isn’t just in some libertarian or economist’s fantasy in which market forces keep landlords from enslaving their residents – this is how it actually works in our real world.

Yet, when we look toward our future, and imagine costly techs that could extend life, many keep imagining that such techs would make us slaves of big bad rich firms. For example, see this video on the Singularity, ruined by lawyers:

Yes, this video gets credit for humor, creativity, and entertainment value. But as social criticism it seems on par with saying that high-rise landlords must enslave their residents.